Public Interest Group Appeals South Carolina Public Service Commission Decision Approving Nuclear Reactors to State Supreme Court

Friends of the Earth Asserts Decision in Error and Not in the Public Interest

May 22, 2009

COLUMBIA, S.C. - The environmental organization Friends of the Earth has today filed an appeal with the South Carolina Supreme Court challenging the legality of a South Carolina Public Service Commission decision approving an application by South Carolina Electric & Gas to build two new nuclear reactors. The filing is believed to be a first national challenge to the type of state law which unjustly forces consumers to pay for nuclear projects in advance, no matter if they fail.

Friends of the Earth, which made the filing May 22 with the Supreme Court in Columbia, S.C., contends that the Public Service Commission order of February 27 that approved the reactor project and the March 25 denial of a Friends of the Earth appeal were in error for a number of reasons. Friends of the Earth also names South Carolina Electric and Gas and the state's Office of Regulatory Staff in the appeal.

"We strongly believe that the decision allowing this nuclear reactor project to go forward is fraught with legal errors and does not serve the public interest. Cleaner, safer and cheaper energy options were ignored," said Tom Clements, Southeastern Nuclear Campaign Coordinator with Friends of the Earth. "The Public Service Commission made an incorrect decision which gives the utility a blank check for its expensive and dangerous nuclear project and we are thus seeking a legal remedy in the interest of South Carolina consumers that will lead to a cleaner energy future for the state."

The Friends of the Earth filing, which will be followed by a more substantive brief, is based on a number of issues, including that the Public Service Commission erred in allowing the project to proceed under the state's Baseload Review Act (the Construction Work in Progress law passed in 2007). That act, which allows electricity rates to be levied for reactors far in advance of their demonstrated use, is unconstitutional as it deprives electricity consumers of property without due process of law. The filing is the first legal challenge to the Baseload Review Act and a decision made under it and is also believed to be the first national challenge to a Construction Work in Progress law.

Further, Friends of the Earth charges that the Public Service Commission was incorrect in not properly analyzing recent developments in the economy and financial markets and that the reactor project was allowed to go forward without an energy efficiency and demand side management plan to reduce the need for new capacity. The Commission also erred in approving the application without placing conditions on the utility's recovery of costs.

Well-known environmental lawyer Bob Guild is serving as attorney for Friends of the Earth, as he did in the organization's initial intervention against the license application, filed May 30, 2008. On December 1, a three-week hearing was held on the application before the Public Service Commission.

South Carolina Electric and Gas is planning construction of two Westinghouse AP1000 reactors at its V.C. Summer site in Jenkinsville, S.C., 25 miles north of Columbia. The reactors are of a design that has never been built before. Site clearing has begun in spite of the fact that the federal Nuclear Regulatory Commission is two years from a decision approving the reactor design and authorizing the construction permit. The Nuclear Regulatory Commission is currently reviewing "Revision 17" of the design and many key issues remain.

In a required filing with the Public Service Commission on May 15, SCE&G admitted that large cost uncertainties hang over the project and presented one scenario whereby the cost for the overall project had increased by more than $1 billion. And, the company admitted in its filing with the Public Service Commission that the construction schedule has slipped three months since the project was approved in February. The South Carolina Public Service Authority (Santee Cooper) holds 45 percent interest in the project but is not subject to Public Service Commission regulation. SCE&G has failed to reveal if it has secured private financing for this risky project.

NOTES:

Friends of the Earth filing with Supreme Court available on request from attorney Bob Guild

Friends of the Earth is the U.S. voice of the world's largest grassroots environmental network, with member groups in 77 countries. Since 1969, Friends of the Earth has fought to create a more healthy, just world.